MUNI ECON Plná verze článku / Full paper ARIAS GOMEZ, H. Y, ANTOŠOVÁ, A. (2021). Trends in the Czech regional manufacturing. In (Klímová, V., Zítek, V., eds.) XXIV. mezinárodní kolokvium o regionálních vědách. Sborník příspěvků. Brno: Masarykova univerzita, pp. 157-163. ISBN 978-80-210-9896-1. DOI 10.5817/CZ.MUNI.P210-9896-2021-19. www.econ.muni.cz/kolokvium www.econ.muni.cz/colloquium MASARYK INSTITUTE OF ADVANCED STUDIES CTU IN PRAGUE XXIV. Mezinárodní kolokvium o regionálních vědách TRENDS IN THE CZECH REGIONAL MANUFACTURING Mgr. Helmuth Yesid Arias Gomez, Ph.D. Ing. Gabriela Antošová, Ph.D. ■ masaryk ^■ff^H institute It r m of advanced U4Vi studies [MViMTil ctu in prague PLAN OF PRESENTATION • THEORETICAL ASPECTS • KIM-KRUGMAN INDICATOR OF SPECIALIZATION • NUMBERS FOR THE CZECH REPUBLIC ',. M of advanced + H studies ej ctu in prague masaryk institute THEORETICAL ASPECTS • According to Ohlin and Krugman in the analysis of regional specialization can be applied similar principles as in the trade theory. • The neoclassical Heckscher-Ohlin trade model argues that incomes of regions vary because of differing factor endowments and factor price. The economic integration and trade in goods lead to income convergence through factor price equalization. • The Heckscher-Ohlin model predicts that regional specialization will arise as regions produce and export products that are relatively intensive in their abundant resource. • The increasing returns model predicts that regional specialization will arise if external economies are significant or if conventional production economies of scale dictate that only a few large plants can satisfy total demand. masaryk institute ilv M of advanced V4Vri studies ctu in prague Ricardian Tradition: Costs Hecksher- Ohlin Endowments -No transport costs -Immobile Factors THEORETICAL ASPECTS Blended Approach Lucca Ricci Krugman,... New Trade Theory New Economic Geography Transport Costs Factor mobility (Krugman, Fujita,—)- The same principles for international specialization can be applied to the international trade and inter-regional trade (Ohlin, Krugman) masaryk institute of advanced studies ctu in prague Krugman, 2008 Manufactures Agriculture Home Foreign Interindustry Intraindustry Krugman, 2008 The combination of increasing returns and comparative advantage are provided with a compelling explanation of the trade patterns. I masaryk i institute li-r M of advanced U4V."1 studies ctu in prague Index of the Regional Specialization: • Where Eij is the level of employment in the industry i = 1, . . ., and n for Region j and Ej is the total industrial employment for region j and similarly for region k. • If the index is equal to zero, then two regions, j and k, are completely despecialized. • If the index is equal to two, then the regions are completely specialized. masaryk institute of advanced studies ctu in pracue In the Krugman book is promptly defined as S-S where S, is the industry i's weight in the first region, and S}* * is the industry i's weight in the second region. Krugman, 1991 According to the chart, European countries are less specialized than American regions. In terms of the economic functions and the role of each American region they are mutually, more diverse than individual European countries. Northeast 1977 NE Midwest South West Avg: 0,253 Avg: 0,17 Krugman, 1991 BEBBA: Long term Trend in the Specialization Index in ctu in prague cp i Manufacturing • As factors became increasingly more mobile and as technological innovations favored the development of substitutes, recycling, and less resource-intensive methods over the twentieth century, regional resource differences diminished. • The growing similarity of regional factor endowments and the fall in scale economies caused regions to become despecialized between World War II and today. r —I 0.9 o,a 07 0,5 0.4 , Regional specialization in manufacturing. Krugman, 2008 masaryk institute of advanced studies ctu in prague USA: Long term Trend in the Specialization Index in Manufacturing From Klier and Rubinstein (2006) Evolution of as Cited by Krugman, 2008 7 of 9 North American transplants in Deep South I masaryk p^nil institute Biaip^; Long term Trend in the Specialization Index in Manufacturing II • Technological innovations in transportation and communication have continuously increased the geographic mobility of goods, factors, and information. • The U.S. economy was predominantly agricultural and most regions were endowed with excellent agricultural land. • However, as manufacturing became more important between the nineteenth and the early twentieth centuries, regional factor endowments became increasingly dissimilar. Regional differences resources, such as energy and minerals, as well as capital and skilled labor became significantly more important as the U.S. economy became a manufacturing based economy. masaryk institute ,'~ /«i of advanced 14VTI studies ctu in prague warn vi w in rnnuvc _ » » Manufacturing Employment by NUTS 2 (2018) Poland Germany Source: Own elaboration with data EUROSTAT,2018 I masaryk I institute li-r M of advanced U4V."1 studies ctu in prague Composition of manufacturing employment by industry, 2018 Composition of manufacturing employment by sector 2010 GEDÍNACE. Manufacture of food products Manufacture of beveraqes Manu f aítu re of textiles Manufacture of wearing Manufacture of leather arid related products Manufacture of wood and of products of wood and cork, except furniture; manufacture of articles of Manufacture of paper and paper products Printing and reproduction of recorded Manufacture of chemical; and chemical products Manufacture of bask pharmaceutic al product; and pharmaceutic al preparations Manufactur e of rubber and plastic products Manufacture of other non-metallic mineral products Manufacture of basic Manufacture of fabricated products, except machinery and equipment Manufacture of computer, electronic and optical products Manufacture of electrical equipment Manufacture of machinery equipment Manufacture of motor vehicle;, trailers and Manufacture of other transport equipment Manufacture of furniture Other mariuŕacturin Repair and installation of machinery and equipment Prague Praha 10,4% 3,0% 1,4% 3,0% 0,3% 6,6% 1,4% 7,4% 2,6% 2,0% 4,0% 4,8% 1,6% 12,0% 4,0% 8,0% 6,6% 3,0% 2,9% 1,7% 4,4% 8,9% Central Bohemia Střední Cechy 7 7% 0.9% 0,5% 1,3% 0 1 % 3,7% 1,5% 2,7% 3,2% 0,8% 5,3% 4.6% 2,0% 10.5% 4,1% :j 6% 9,5% 7,5% 29.6% 1,7% 1,3% 4,0% 2,9% Southwest Jihozápa d 7,3% 1,8% 1,1% 2,1% 0,2% 5,2% 1,3% 1,0% 1,3% 0 1 % 6,5% 3,7% 1,5% 15,5% 2,8% 11,4% 16,7% 1,9% 2,0% 4,2% 2,9% Northwest Severozá pad 5,4% 0,8% 3,1% 1,4% 0,3% 2,5% 2,5% 1,3% 6,2% 0,1% 5,8% 10,1% 3,3% 16,6% 1,2% 8,4% 7,6% 12,1% 0,7% 1,5% 2,8% 6,0% Northeast Severový chod 5,6% 0,7% 4,2% 1,5% 0,2% 3,0% 2,1% 0,9% 2,1% 0,4% 8,0% 5,4% 2,1% 12.6% 5,8% 7,9% 11,1% 18,2% 1,1% 1,3% 3,3% 2,3% Southeast Jihovýcho d 9,1% 1 5% 2 1 % 2,8% 0,8% 5,0% 1 3% 1,6% 1,1% 1,5% 7,4% 3,8% 2,4% 16,3% 2,7% 9,2% 13,3% 6,4% 1,2% 2,8% 3,9% 3,6% Central Moravia Střední Morava 8,7% 1,1% 0,8% 2,4% 0,8% 3,9% 1,5% 1,1% 3,3% 0,2% 12,8% 2.6% 2,2% 19.9% 4,1% 10,5% 9,2% 4 2% 2,9% 2,3% 2,1% 3,5% Moravian-Silesian Moravsko slezsko 6,8% 1 1% 1,2% 1,5% 0,2% 2,8% 1,6% 1 4% 1 4% 1,9% 4,5% 1,8% 12,5% 14 1 % 3,1% 7,2% 9,3% 16,4% 3,1% 1,8% 1,2% 4,6% Source: Modified from EUROSTAX 2018 masaryk institute 8S3ata by NUTS2 regions and NACE (from 2018) SBS data by NUTS 2 regions and NACE Rev. 2 (froni 2008 onwards) [sbs_r_nuts06_r2] NAME ENGLISH F;r;criín' iloyed ■ number (2016) NACER2 Manufariur ins Manufad ore of food products Manufad ore of bBVEiSO.es Manufad ore of textiles Manufad ore of wearing Manufad ore of leather and Manufad ureof wood and of Manufad ureof paperand paper Printing and reprodudi on of Manufad ureof chemicals and Manufad ureof basic phaimace Manufac ture of rubber and Manufadure of other non-metallic mineral Manufadure of basic metals Manufadure of fabricated metal products, Manufadure of computer, electronic and optical Manufadure of electrical equipment Manufadure nf machinery and equipment Manufadure of motor vehicles, trailers and Manufadure of other transport equipment Manufadure of furniture Other manufaduri ng Repair and installation of machinery and GEQiTIME r 201! 2016 2016 2016 2016 2016 2016 2016 2016 2016 2016 2016 2011 2118 2016 201Í 2010 2010 201! 2010 2010 2016 2016 Czechia 1 327 215 100101 16 986 25 227 26163 5107 53 242 21419 24211 32 230 10 752 95193 58 363 44858 196 732 48 010 108 240 132 491 181486 24367 24931 43 027 51627 Pracue Cesío ií;:;if 100101 16 986 25 227 26103 5107 53 242 21419 24211 32 230 10 752 95193 58 363 44 858 196 732 48 010 108 240 132 491 181486 24367 24931 43 027 51627 Piatia 91123 9601 2 7G2 1263 2763 253 6103 1330 6 850 2 382 1860 3716 4434 1518 111:3 3 738 7429 5165 2 784 2 595 1 f 70 4137 8 303 Central Bohemia Southwest Northwest Northeast Southeast Central Moravia Střední Cechy 156 516 12185 1444 724 1995 211 5904 ■ 4242 5 086 1289 &304 7 358 3247 15606 6 449 5715 11876 46 906 2 624 1997 6 320 4555 Jihozápad 167799 12307 3 055 1861 3441 257 8 728 2116 1742 2151 92 10 025 6 288 2 532 25 954 4774 15 966 19184 28 012 3144 3 309 7 026 4817 Severozápad 116760 6 334 971 3 671 1632 298 2 939 2 892 1551 7 247 159 6810 11807 3 871 19 381 1427 9 821 3 896 14186 777 1747 3 290 7 041 Severovýchod 231676 13100 1656 9 805 3 407 534 6 999 4800 2 089 4761 857 18 539 12 634 4758 29 324 13 343 18 387 25 575 42 251 2 485 3 073 7 752 5 321 Jihovýchod 20 261 3 432 4686 6321 1790 11091 2 870 3 497 2 403 3 296 16 445 8 402 5410 36 240 6 056 20 524 29 492 14254 2612 6 291 8 772 8 040 Střední Moro ISIíff 15735| 1038 1424 4300 1526 2 669 2014 5 969 309 23 342 4655 4007 36217 7 451 19153 16 687 5 201 3 357 6 366 Moravian-Silesiao Moravskoslezsl 15526l| 1 □ 5S71 1707 1793 2 304| 298| 4-4071 2 430 2 225 2 232 2 888 7 021 2 785 19 465 21847 4772 11246 14516 25 483] 4828| 2810| 1364 7184 Source: Modified from EUROSTAX 2018 masaryk institute of advanced studies ctu in prague Divergence in Manufacturing Employment Prague Central Bohemia Southwest Northwest Northeast Southeast Central Moravia Moravian- Silesí Praha Strední Cechy Jihozápad Severozápad Severovýchod Jihovýchod Strední Morava Moravskoslezsk NUTS2 rooinnc (Mladá Boleslav, Kutná Hora, Kolín) (České Budéjovice, Plzeň, Strakonice, Tábor) (Ústí nad Labem, Karlovy Vary, Teplice) (Hradec Králové, Pardubice, Jablonec nad Nisou, Česká Lípa) (Brno-město, Jihlava, Třebíč, Znojmo, Hodonín) (Olomouc, Zlín, Kroměříž, Vsetín) (Ostrava, Bruntál,Frýdek-Místek) Prague Praha Central Bohemia Střední Cechy (Mladá Boleslav, Kutná Hora, Kolín) 0,603 Southwest Jihozápad (České Budéjovice, Plzeň, Strakonice, Tábor) 0,525 0,414 Northwest Severozápad (Ústí nad Labem, Karlovy Vary, Teplice) 0,609 0,567 0,421 Northeast Severovýchod (Hradec Králové, Pardubice, Jablonec nad Nisou, Česká Lípa) 0,613 0,395 0,266 0,387 Southeast Jihovýchod (Brno-město, Jihlava, Třebíč, Znojmo, Hodonín) 0,444 0,593 0,246 0,460 0,421 Central Moravia Střední Morava (Olomouc, Zlín, Kroměříž, Vsetín) 0,512 0,638 0,408 0,527 0,520 0,317 Moravian-Silesian Moravskoslezsko (Ostrava, Bruntál,Frýdek-Místek) 0,604 0,510 0,343 0,478 0,409 0,491 0,536 Own calculation based on data EUROSTAT Index of regional Specialization Average 0,473 MASARYK INSTITUTE OF ADVANCED STUDIES CTU IN PRAGUE REFERENCES Sukkoo Kim. Expansion of Markets and the Geographic Distribution of Economic Activities: The Trends in U. S. Regional Manufacturing Structure, 1860-1987. The Quarterly Journal of Economics, November 1995 Krugman Paul (1991). Geography and Trade. MIT Press. Krugman Paul (2008). The Increasing Returns Revolution in Trade and Geography. Nobel Prize Lecture. Stockholm. MASARYK INSTITUTE OF ADVANCED STUDIES CTU IN PRAGUE THANK YOU FOR YOUR ATTENTION Qand A?